(Yicai) Sept. 16 -- Chinese electric carmaker Xpeng Motors and Canadian auto parts manufacturer Magna International have announced a partnership, with subsidiary Magna Steyr set to produce two fully electric XPeng models at its factory in Graz, Austria.

Magna Steyr will initially make the Xpeng G6 and G9 at the Graz car plant, and production is set to start this quarter, its Aurora-based parent company announced yesterday. The factory already makes cars for various global brands, including the Mercedes-Benz G-Class, BMW Z4, and Toyota GR Supra.

Xpeng began its overseas expansion in 2021 by exporting cars to Norway, but this will be its first local production in the continent. The Graz factory will eventually produce more of Xpeng’s models, such as pure battery sedans, mid-sized sport utility vehicles, and autos based on the firm’s Kunpeng electric system.

The deal will also allow Guangzhou-based Xpeng to mitigate hefty European Union tariffs on imported Chinese electric vehicles. Since it will be exporting only parts to the Magna car plant, not complete vehicles, lower tariffs will apply.

“Xpeng will hike its competitiveness in Europe through localized production, which will lay a solid foundation for the firm to raise its market share,” the Chinese automaker said.

“Our partnership with Magna fits perfectly in our vision and strategy to strengthen our European capabilities,” said Brian Gu, vice chairman and president of Xpeng, adding that the firm has “a long-term commitment to Europe.”

Xpeng has also just launched its first research and development center in Europe. It opened in Munich, Germany, on Sept. 10. The company is now doing business in more than 46 countries and regions, and it sold 18,701 vehicles in overseas markets from January to July, up 217 percent from the same period last year. 

“We are thrilled to collaborate with Xpeng, marking a significant milestone as our first Chinese OEM partner here in Europe,” said Roland Prettner, president of Magna Complete Vehicles. “By leveraging our extensive experience and state-of-the-art facilities, we are well-positioned to support Xpeng’s ambitious goals for the European market.”

Magna has reportedly secured a contract with another Chinese carmaker, Guangzhou Automobile Group, although specific details have yet to be officially disclosed.

Editor: Tom Litting